Oil headed for a second monthly increase, its biggest since October, as investors awaited a speech by Federal Reserve Chairman Ben S. Bernanke.
Futures advanced as much as 1.4 percent. Chairman Ben S. Bernanke is scheduled to speak today at a symposium where in 2010 he foreshadowed economic stimulus measures by the bank. Prices fell yesterday to the lowest close in two weeks as producers worked to restore Gulf of Mexico output and refiners prepared to resume operations after Hurricane Isaac passed. Companies halted 95 percent of U.S. oil production in the Gulf and 73 percent of natural-gas output, the Bureau of Safety and Environmental Enforcement said yesterday.
“Bernanke is likely to outline the fact that the Fed has ‘options’ and is prepared to use them to stimulate the economy if necessary,” said Guy Wolf, a strategist at London-based commodities broker Marex Spectron Group Ltd. “Supply fundamentals have been tight for crude recently and there is no immediate sign of that slipping.”
Oil for October delivery on the New York Mercantile Exchange rose as much as $1.32 to $95.94 a barrel and was at $95.84 a barrel at 1:45 p.m. London time. The contract yesterday dropped 0.9 percent to $94.62, the lowest close since Aug. 15. Prices are down 0.3 percent this week, the first weekly decline since July 27, and have gained 8.8 percent this month.
Brent oil for October settlement rose 86 cents to $113.51 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate narrowed to $17.67 from $18.03 yesterday.
Fed Chairman Bernanke is due to speak today in Jackson Hole, Wyoming. Policy makers have said they are prepared to provide new stimulus “fairly soon” unless there is evidence of “substantial and sustainable” improvement in the recovery, according to the minutes of the Federal Open Market Committee meeting that ended Aug. 1. The group plans to meet in September.
Companies including BP Plc and Chevron Corp. said they are assessing offshore facilities in the Gulf of Mexico before returning workers. Isaac was downgraded to a tropical depression after pounding the New Orleans area on the seventh anniversary of Hurricane Katrina.
Four oil refineries on the U.S. Gulf Coast, capable of processing 882,000 barrels a day and representing 5.1 percent of the country’s capacity, remained shut after Isaac passed.
Isaac was about 95 miles (150 kilometers) south-southwest of Little Rock, Arkansas, the National Hurricane Center said in an 11 p.m. New York time advisory. The storm, which made landfall as a hurricane on Aug. 28, was moving north at 10 miles per hour, with maximum sustained winds of 30 mph.
Petroleos de Venezuela SA plans to finish cooling the area affected by a fire at its largest refinery as early as today and resume operations, Oil Minister Rafael Ramirez said yesterday.
Firefighters continued to douse storage tanks with foam that spilled out onto the streets outside the Amuay refinery as crews worked to remove rubble from homes and businesses destroyed by an Aug. 25 blast.
Iran wants global oil prices to rise to $130 a barrel and is producing as much crude as it did before the U.S. and Europe tightened sanctions on its exports, Oil Minister Rostam Qasemi said yesterday without specifying a grade of crude.
Crude in New York may decline next week on speculation that Gulf of Mexico output and refinery operations will quickly resume after Hurricane Isaac, a Bloomberg survey showed.
Seventeen of 29 analysts, or 59 percent, forecast prices will decrease through Sept. 7. Eight respondents, or 28 percent, predicted that futures will increase and four said there will be little change in prices. Last week, 57 percent of analysts projected an increase.
Still, prices have technical support along the middle Bollinger Band on the daily chart, at about $92.89 a barrel today, according to data compiled by Bloomberg. Futures rebounded from this indicator about four weeks ago. Buy orders tend to be clustered near chart-support levels.